Victoria earns a gross annual income of $124,482 and is buying a home for $225,500. She is making a 20% down payment and financing the rest with a 30-year loan at 4.5% interest. (a) What is the mortgage amount she will borrow?

(b) Can she afford this mortgage?

(c) What will her monthly mortgage payment be?

(d) What will her total payment for the house be?

(e) What is the amount of interest she will pay?

(a) The mortgage amount she will borrow is $180,400

(b) Yes she can

(c) Her monthly payment will be approximately $914.06

(d) Her total repayment is approximately $329,061.6

(e) The amount of interest is approximately $148,661.6

Step-by-step explanation:

The details of the transactions are;

The gross annual income Victoria earns = $124,482

The cost price of the home she is buying, C = $225,500

The amount she is making as down payment = 20%

The duration the loan she id financing the rest with, t = 30-years

The interest rate on the loan, r = 4.5%

(a) The mortgage amount she will borrow, 'P', is the cost of the home less the down payment

The down payment = 20% of the cost of the home

∴ The down payment = (20/100) × $225,500 = $45,100

∴ P = $225,500 - $45,100 = $180,400

The mortgage amount she will borrow, P = $180,400

(b) Using the 2× to 2.5× gross income rule, we have;

2 × her annual income = 2 × 124,482 = 248,964

∴ 2 × her annual income > The mortgage = 180,400

She can afford the mortgage

(c) The monthly fixed payment for the mortgage is given as follows;

Where;

n = The number of periods per year = 12 monthly periods per year

180,400*0.045*(1 + 0.045)^(30)/((1 + 0.045)^(30) - 1)

Her monthly payment will be M ≈ $914.06

(d) The total repayment is given as follows;

n × t × M

∴ 12 × 30 × 914.06 = 329061.6

The total payment for the house = $329,061.6

(e) The amount of interest = The total payment - The principal loan amount

∴ The amount of interest = $329061.6 - $180,400 = $148,661.6

I will not know this answer because my class is 8th